Friday, December 7, 2012

Refi, the Saga Continues


Every week I hear Suze Orman telling me to refinance my home mortgage at historic low rates, and I feel guilty. So, I tried again. Armed with the real estate appraisal that nixed our first attempt to get a refi, I investigated other options online. The answer? A HARP loan.

When I couldn't find a local bank that does one, I noodled around on the net. I plugged some figures into website mortgage calculators, and then my innocent wandering targeted me for a phone call from a national mortgage company.

Hmm...must be a scammer, right?

Nope. The man I talked to was the first person who actually came across as a sincere human being. I know what shoddy salesmen talk like. I also know how good salesmen talk. He wasn't like those loan officers I'd talked to recently, the guys who sounded as if they were on two phone calls at once and simply not paying much attention to either. We had a lovely conversation, and he ended up sending me some loan papers to look at. This is required by law. Fairly recent legislation actually simplified the Federal Truth-in-Lending Disclosure form. Because my husband was a mortgage underwriter for a decade, we thought reading these papers would be easy.

It wasn't. We kept getting confused about how much money we'd be paying out, how much we'd end up paying monthly, and how much we'd be bringing to the closing table. In these days of overwork being common, my husband had no time to pay a lot of attention to the details of a loan from some strange mortgage company we'd never heard of. But it's a federal credit union, the salesman said. Still, it's not a name I know locally. So when my husband hesitated, I googled the mortgage company's name.

There's plenty of information on the Internet, and there are many positive and negative opinions freely expressed about everything, including the bank in question. Trying to decipher the truth, or even decide if the problems experienced by other people seeking mortgages were not likely to be troubles we experienced---well, it wasn't easy. Finally it all came down to my comfort level dealing over the phone with this one salesman. I liked him. I figured that no matter how big a profit his company would make on our refi, the refi itself was still going to be a better deal for us than just doing nothing and sticking with our current high mortgage rate.

We took the plunge, with high credit ratings, on-time mortgage payments, bank savings, and steady employment all on our side. It has been three months now, and we still haven't gotten the okay to close on this refi. We haven't gotten the super-low interest rates mentioned in the media, either, but one that saves quite a lot of interest, anyway. Unless rates go up before this darn thing closes. Banks are inundated with refi requests these days, and any loan going through a special government program gets extremely careful handling. The refi is dragging on and on and on. 

On the good side, we had very little paperwork to complete, our loan salesman sends me regular updates, and sooner or later, it will all fall into place. Hopefully, before Congress decides to remove home mortgage interest as a tax deduction.    

Wednesday, November 14, 2012

What to Do with a Windfall, Part II

Your windfall cash is safe in an insured bank account, or several, but not earning you much. Now what do you do with it? You've already paid off your debts.

Max out your retirement savings in a mixture of investment types. Any combination of individual stocks, mutual funds, ETFs, IRAs, T bills, and other types of investment will spread your risk, preserve your new capital, and, with luck, increase its total. Do not put all of your windfall in any one investment type. Be leery of anyone who approaches you or advises you to put large chunks of cash into any specific investment. Even an investment advisor you pay a fee to work for you might be more interested in earning high sales commissions than in steering you to the investments that are most profitable for you. There are the outright crooks to beware of, too. Go with your gut. If you don’t understand an investment or don’t trust the person advising you, back away. If you trust the person but the investment scares you, also back away.

Does it make sense to pay off your home mortgage, or to buy a house outright if you are currently a renter? Should you refinance your mortgage and toss in some of the windfall to increase your equity? These issues are determined by your future plans. Do you want to stay in this house, this apartment, or this area for a substantial number of years, or until you die? If not, then consider what kind of housing your windfall could help you obtain somewhere else, and how tied into your current area you want to be right now. Ownership of real estate, as we have seen lately, can be a negative. It can also be a delightful positive. You can buy a house or condo with a mortgage; you don’t have to pay it all up front. Keep the cash that would pay off the home in a safe account that earns you some interest or dividends. Best of both worlds.

Perhaps you want to start a business, and the windfall could be your seed money. It’s usually best to start a risky endeavor using other people’s money, but you might want or need to capitalize some of your new business in order to retain a large enough ownership share and to attract venture capital. But putting all your money into a new business, or using your money as the only capital for that business, is not a smart move. If you believe in your idea, others will, too. Formal venture capital, informal arrangements through Kickstarter or other Internet loan mechanisms, or going into a deal with partners (protected of course by a lawyer-written partnership agreement) are possibilities once you arrange your windfall to cushion your basic living needs.  

Perhaps you want to quit your job and write a book or invent something and this money could support you during the years it will take you to complete your project. Perhaps you’d like to go to school, or get a graduate degree, and your windfall will provide the cash for tuition and living expenses. The windfall acts as a temporary cushion while you pursue your immediate goal. The trick with this plan is to make your goal one that can be achieved in a specific number of years, ideally no more than five or seven. Then do the math. Will your windfall money last that long, paying for everything you’ll need or want during that period? Or will you have to come up with other money to make it work? Again, it is wise not to use all of your windfall on one project. After seven years, you’ve graduated from college and gotten your advanced degree, debt free, but it would be good to still have some of your windfall left while you decide what next to do with your life. Sounds like fun, regardless, doesn’t it?  

Maybe you’d like to buy a boat and go fishing for the rest of your life. First do the calculations to cover health insurance--including long-term care insurance--and living expenses for the rest of your life. Depending on the size of your windfall, there are two ways to calculate this. If the windfall is massive, there is a chance that if you invest it carefully, you can live off the interest or dividends from your investment the rest of your life without even touching your principal. Or, you can treat it like an IRA, invest it and draw out the typical annual minimum of 4% per year that most financial gurus say is a safe figure. Again, your principal remains undepleted because investment gains cover what you withdraw. Annuities might also be useful in planning a future of leisure, but they are expensive and don't give you full-time access to your money.

Finally, ask yourself if you want to spend all of your windfall in one place. Probably, you don’t. Paying off debts is wonderful but most people also want to buy themselves some toys. Buying a new house is fun, but people usually want a new car to go with it. And so on. Spreading your windfall over several projects probably will result in the most happiness. Why? Because almost any area of interest can absorb an amazing amount of money. Your 401k or IRA is a money hog; it’ll take all you have to give and you can still end up feeling you haven’t funded it sufficiently. An apartment in Manhattan can easily cost several million dollars. It’s possible to have $20 million and still not have enough money to buy that dream house—if your dream home is the modern equivalent of the palace of Versailles.

It is not necessary to run yourself out of money to feel you have used it wisely. Decide how much you must apply to your various wants and needs to cover them and to leave you with a sense of contentment. Your windfall should give you contentment, even if it’s not big enough to allow you to purchase an enormous yacht. Maybe it’s enough to rent a yacht for a month or two, to check out that style of living. Same thing with a private jet. Go for new experiences rather than accumulating property it will cost you to own and maintain.

One more thing. If your windfall money is blood money, get some of the taint off by doing good with it. Once you take care of your debts, your living expenses, and your financial future, look around for worthy causes to donate to, people to help, or something valuable to build that will enhance your community or the world. Some possibilities are gifts to higher education, challenge gifts to motivate students to excel, buying and rehabbing a significant historical building, or donating to medical research. Bill Gates and Warren Buffett, with all their billions, can’t save the entire world themselves. You can help. Make the money that came at a high price worth something by using it to create something positive.  

Saturday, October 27, 2012

What to Do with a Windfall, Part I

Windfalls do happen. A relative dies and you inherit some cash. You get an insurance payout. You sell something for big money. You get a large cash bonus from your employer. You win a lawsuit. You get a lump sum distribution on an investment. You win the lottery.
What do you do with this money? You never planned for it. It's not in any budget. Sometimes it's an enormous sum, which is even more terrifying. It's more money than you ever saw in one place in your entire life. What do you do with the money?

First, take a deep breath. Put the money in a federally insured bank account that pays interest. If it is over the amount insurable by one bank, create several bank accounts at different banks so the money is fully insured. Then take another deep breath. Your money is safe. It might not be earning you much of anything at today's interest rates, but it's still completely safe. If you do absolutely nothing, your money will still be there. If your windfall occurred because of some tragic event, take your time deciding what to do next. Allow yourself to heal a bit before you tackle what to do with the money. It’ll be there when you are ready.

Next, make a list of all your assets and all your debts. Everything. The car loan, the mortgage, the 401k, the college tuition fund, the college loan, credit card balances, what you owe your brother, everything. In other words, determine your current net worth. If your net worth is negative, it’s pretty obvious that you’ll need to use some of your windfall to pay down debt. Do it wisely. First pay the credit cards and the student loans, both of which have the potential to increase their interest rates and haunt you for decades. Car loans should go next since vehicles are a depreciating asset. After those immediate needs are taken care of (and you’ve paid back any relatives or friends to whom you owe money), you need to think.

Take your time again. Even a million dollar windfall starts to look like peanuts when you divide it by the number of years you can expect to live. If you have another 60 years to go, that cool million is only $16,667 per year, not including any earnings it generates. Not a fortune unless you can turn it into a lifelong moneymaker. What you want to do with the windfall is determine how it can change your life for the better.

Depending on how public your windfall is, you will likely be inundated with pleas from family and friends for loans or outright gifts, plus from total strangers who want you to pay for their medical bills. Do not yield to guilt-inducing pressure. Few of these importuning individuals will have your back if you run out of cash. Their pleas are a distraction when you ought to be educating yourself about the best way to manage your windfall.

Here is where advice diverges radically. Some people will tell you to buy an annuity that will pay you an income for life. Others will suggest a deferred annuity that kicks in only when you are in your final years. Others will of course recommend the stock market, the bond market, or various other investments that are meant to increase capital but hopefully will also preserve it. Some people want you to buy life insurance. Others, most of them outright crooks, want you to invest in various get-rich-quick schemes or buy overpriced precious metals. That’s the problem with receiving a windfall. Everybody has a great idea about how you can spend it. Meanwhile, you're trying to cope with the shock of having all that money.

Next Post: What to Do with a Windfall, Part II

Thursday, September 20, 2012

How to Throw a Good Wedding

This is about money, but only in a tangential way. If you intend to get married and do not want to spend the current American average of $30,000 on your wedding, you need to do some careful planning. Cutting out all your expenses yet expecting your friends and relatives to spend lavishly on you is not a plan. If you don’t want to order a $500 wedding cake, that’s fine, but you still have to provide refreshments for all your guests and no, that does not mean a cash bar. A wedding reception is a party. The ones throwing the party have an obligation to to entertain their guests. Making it clear in advance what the parameters of your hospitality will be is a kindness to all you invite.

And please, invite out-of-town guests only if you intend to be a good host to those guests. If you don’t want to speak to Cousin Laura from Topeka, don’t invite her, and don’t solicit her in any way for a wedding present, either. If you do invite her, you need to make sure she has a lovely time at your wedding.

Yes, I get that you are young, you are urban, and you’d really like to just have a big party with all your same-age friends. You’re okay with distant and elderly relatives showing up that your mother thinks ought to be invited, but you don’t want to spend your time with them. Here’s how to satisfy everyone:

1. Ask yourself if Cousin Laura from Topeka will be comfortable at that funky little bar down the street where you’d like to hold the reception. No? Then either do not invite Cousin Laura, or don’t hold the formal reception at a bar. Hold a wedding pre-party for your close young urban buddies at the bar, and find a formal wedding venue for the actual reception, one where older people and very young people who cannot legally enter a bar will be comfortable.

You cannot reasonably invite an out-of-town guest to only one part of the wedding festivities, by the way. If you invite Cousin Laura to the wedding ceremony, you must invite her to the reception, too. If there is a general party before or after, she should be invited to that. She just spent $1,000 on airfare, hotel, and clothes to come see you get married. You must show some class by making sure she gets her fair share of the wedding entertainment.   

2. Find a reception venue that will allow you lots of freedom. You don’t want to pay a fee per guest, because then you can’t invite little Susie, somebody’s five-year-old, even though little kids are hilarious fun at receptions. You don’t want to have to triage guests: “Is Joe worth $150? Do I like Rosie enough to pay $100 to entertain her for four hours?” Venues that allow freedom do exist, but it takes work to find them. Here’s a hint: a suburban home usually has a pleasant back yard and it is cheap to rent a tent.   

3. Arrange reliable transportation for all out-of-town guests throughout the festivities. This means someone picks them up at the airport, drives them to the relative they’re bunking with or the hotel they’re staying at, and drives them to all the wedding events. It would be a kindness to arrange a free place for out-of-town guests to stay, but it’s not necessary. It’s essential that you arrange transportation in case they are too old to drive or would be lost trying to drive in your city.

4. Buy food, and lots of it. At all weddings, the guests descend on the food like locusts. The trick is to not pay a per-plate fee to a caterer or use table service. Instead, arrange for platters, large containers, etc. at a buffet. You’ll still have to pay someone to set up the food and keep it coming, but that costs far less than waiter service, and there is less wasted food. Think simple but bountiful when it comes to food. You’ve seen or participated in elaborate tasting rituals and considered very elaborate foods, but the truth is most guests would prefer food they recognize. Wedding guests are perfectly happy to eat quite ordinary food if there’s plenty of it. Your local grocery chain's bakery can turn out a creditable wedding cake that will please most cake-eaters.

You also need to remember to arrange meals for out-of-town guests or give them a program in advance so they know when food is available as part of the wedding and when they are on their own. Remember that when you hold a party—and that’s what a wedding is—you are responsible for offering refreshments to your guests. BYOB does not work at a wedding.

5. Provide seating. At the ceremony, make sure there are enough chairs for everyone. For the reception, rent or borrow enough chairs and tables for most if not all of your guests. Don’t worry about decorating the tables or creating seating arrangements. It’s enough to have a place to casually sit down to eat. Ideally, at a party people get up and mingle, or get up and dance.

6. Get some music. It’s an event, and it deserves music. It only costs a couple hundred dollars to hire an organist who can play conventional wedding tunes before, during, and after a church ceremony, because wedding ceremonies themselves are short. It costs nothing to get a friend to bring a boom box to the party venue, or to get a knowledgeable friend to bring a more elaborate system. Have it tested in advance, of course. Bottom line, you do not have to hire an expensive DJ who will play inappropriate music too loud for your guests to talk. You do not have to provide a dance floor. People who want to dance will dance anywhere, as long as you provide music.

7. Speak to every guest you invited. Yes, you’d prefer to hang with your friends, but you must greet Cousin Laura and thank her for coming all this way, and extend your hope that she’s enjoying herself, plus introduce her to your new relatives. This is part of being a good host or hostess, especially when a friend or relative travels a long distance to your wedding. It’s your job to show hospitality to your guests.

8. Provide much more food and drink than you think any reasonable crowd will consume. (Have I said this before? Yes? That’s because food and drink are a key part of any good party.) If you don’t want to pay for alcohol, provide some other liquid refreshments, and plenty of them. 

Finally, try not to be too selfish. Sure, it’s “your special day,” but the truth is it’s your family’s special event, and you are putting your friends and relatives to significant expense and often inconvenience to be there for you. So be kind, be present, smile at everyone, dance with the little kids, and have a good time.       

Sunday, September 16, 2012

How to Deal with Medical Bills Update

Here’s something I wasn’t sure existed anymore: Hospitals that will forgive big bills incurred by people who have no money to pay them.

Someone I know recently got a letter announcing that the hospital that was owed over $45,000 has granted this person “charity status,” and quashed the bill. That’s right: 45,000 big ones.

This is a very interesting category of medical bill outcome, because it does not involve the IRS. The medical provider simply wipes out the bill, and the person who owed that money no longer owes it and does not have to pay income taxes on the forgiven amount.

Charity status is a very different situation from one in which a credit card bill has been written off. The credit card company will issue the person a 1099 showing the written off amount as income. The person who could not pay, say, $900 on a credit card, will now have to pay income taxes on that $900. Depending on how down-and-out the person is, that might end up being zero in taxes, but it might be as much as 30%, because for sure if the federal government considers it taxable, so will a state government.

So, it seems to me, given these two very different tax results, people who have medical bills they can’t pay (and know they never will be able to pay) should ask the medical provider to be granted charity status. Not a write-off.

Try it. It never hurts to ask. Apparently, there are still some good people left in this world.

Friday, August 24, 2012

Trying to Get a HARP Refi

Since we got shut out of a no closing costs refi from our bank, and the bank did not suggest any other type of refi, I next had the brilliant idea to try for a HARP (Home Affordable Refinance Program) loan.
HARP is a loan program of the federal government that is only available to people whose loans are owned by Fannie Mae or Freddie Mac. The idea is to help homeowners under pressure stay in their homes and not go into default. There's a convenient government website where you can read all the details, and a link to look up your loan and see if either company does. Most mortgage loans get sold to one of these companies. (The bank that sends you a mortgage bill every month merely services the loan; it does not own the loan.)

Here’s the beginning of the HARP website info:

“If you're not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined, you may be eligible to refinance through MHA's Home Affordable Refinance Program (HARP). HARP is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply.”

The website explains exactly what circumstances qualify for a HARP loan,

You may be eligible for HARP if you meet all of the following criteria:
  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

The beauty of the HARP loan is that you don't have to be underwater on your home to qualify. As long as your home value has dropped beyond a certain point, and thus your loan-to-value ratio has gotten over 80%, you can get a HARP loan. You won’t have to pay PMI (private mortgage insurance) if you don’t already. Even though your loan-to-value ratio has changed because your home's value has declined, you don’t get penalized with PMI and you get a lower mortgage rate that will save you hundreds every month and many thousands over the life of your loan. This is a very good deal.

Sounds wonderful. Now try to find a HARP loan. Not so easy. Lots of banks don’t offer them. Make that LOTS and LOTS and LOTS of banks don’t offer them. Internet banks claim they do, but then they want enormous closing costs, and you certainly are not paying that wonderful 3.5% we hear about in the media. You’re paying a lot more. Or they want you to sign up for free trials of other services. What’s up with that? And just who are these Internet lenders, anyway? Getting a HARP loan would be a lot easier on my nerves if I could go to a bricks-and-mortar bank to do it. So far, I have drawn a blank despite following the HARP website's bank locator for my state. Sigh.

Why is this wonderful government HARP deal so hard to access? I’ve started calling banks again, and the loan officers are all too busy to talk to me, so they must have plenty of business with straight refi loans. A HARP loan is a better deal for the customer, so of course they don’t offer them.

But I persist.    

Sunday, July 8, 2012

Refi Setback

By dint of nagging more than one overly optimistic sales person, we got our home mortgage refinance paperwork started at no cost to us. Lots of papers, secret passwords, and e-mail messages were sent and received, and bank statements and a few other papers were found to add to the bundle. Numerous good faith documents were initialed and signed, and then a pleasant gentleman came to our home to do an official appraisal.

A week later, our loan officer called to say our home value was not sufficient for the type of loan we’d applied for. This was a little disappointing, but since the appraised value is more than what we owe on the house, even if we sold it today at that price we’d walk away with some money after the real estate agent was paid. Add in the value of living in the house for eight years and deducting the mortgage interest from our taxes, and I’d say we’d come out ahead. But we would not have a huge fistful of dollars to fling at the next house.

That’s the rub about declining home values. For the middle class, the family home has always been the one asset likely to appreciate. I say “likely” because twice in my family the exact opposite occurred. Two houses in two separate city neighborhoods fell victim to a changing racial makeup and to a dramatic loss in single family usage, too.  It’s nice to know we aren’t under water on this house. Nice to know our home only lost 17% of its value from the purchase price we paid. And nice to think that in a few years, it’ll probably regain that value. Usually, one buys a house to live in it for a while, and usually, that pays off with a big capital gain.

What surprises me, given the disclosures we made about our financial situation when we started the loan process, is that our loan originator did not suggest any other type of loan after the appraisal came in. True, we could not qualify for the no closing costs loan unless we made up the shortfall to a loan-to-value of 75%, which we have no interest in doing. This is hardly the time to become cash poor and land rich by throwing big wads of money at the principal owed on a home. Not unless you plan to live in that home until you die. And even then, depleting liquid capital isn't a good idea. Yet we would have qualified for a straight mortgage loan with closing costs, points, and PMI  (private mortgage insurance). How much more sales effort would he need to make to turn us into paying customers? Perhaps this loan sales guy only is empowered to sell one kind of loan, but I find that hard to believe. 

What did we gain or lose out of this refi attempt? We gained knowledge of what our house is likely worth today, plus or minus a few amenities and cosmetics. We could have gotten this from a real estate agent, but it’s asking a lot of somebody you don’t plan to do business with to give you a professional opinion. It’s close to cornering a doctor at a party and talking symptoms. Real estate agents today are very busy with all the short sales being picked up by speculators. Even if the housing market never recovers to its crazy 2005–2006 level (and it will, but by then perhaps those dollars won’t mean as much), this is an excellent time to invest in real estate. Prices are at historic lows, and sellers usually are so desperate they will make all sorts of monetary concessions. Ten or twenty years from now, we’ll be hearing about people who made huge fortunes in real estate during this recession. So, yes, real estate agents are busy.

Meanwhile, we’re looking for another loan. Now that we’ve struck out with the bank that we send our mortgage checks to, we have the entire world of banking to choose from. It’s a bewildering array of choices.

Friday, May 11, 2012

Trying to Get a ReFi is Crazy


My bank, which shall remain nameless but has a lot of barbarians running around in their funny TV ads, keeps suggesting I refinance my mortgage.

Okay, fine. Any mortgage obtained nearly a decade ago, when mine was, is likely to be at a loan rate far in excess of current rates. Refinancing to a lower rate sounds like a wonderful idea. I save interest over the life of the loan, I don't have to do a full loan application because it's with the same bank, and my monthly payment goes down. Also, they claim they have a "no closing costs" loan. No closing costs, that's music to my ears. I don't have to comparison shop, just talk to my own bank. Sounds great.

I call the bank. I give them information over the phone, and I know they have access to lots more because I also have checking and savings accounts with them. So, right away, they know I am solvent, that I've been paying the mortgage on time for eight years, and that I even have cash sitting idly in a rainy day savings account. And then they ask me what my house is worth today.


Ha-ha-ha. Guys, I'm not a real estate agent. I'm not a mortgage underwriter. I'm not a home appraiser. I have no blinking clue what my house is worth today.

People in my state are out of work and the industries that used to employ them have packed up and left. People in my state think they're doing okay if they live in a trailer they actually own. People in my state are making it day-to-day through the financial help of relatives.

What is my house worth today? Is the middle-class castle on the hill worth anything if the people down below are starving? I don't have the answer to this question.

The nice lady on the phone insisted that she could not pass my information on to a mortgage specialist until I gave her a guess at what my house is worth. Her computer wouldn't allow it. It wouldn't allow "zero," either. Finally, I just gave her the purchase price I paid.

I hope this bank knows what it's doing, but asking me to value my own home shakes my confidence in the refi process. And in its likelihood of success. I have this sinking feeling that the big smart bank does not have a clue about the value of my home and thus my potential loan-to-value ratio. In fact, the bank may just be in the business of taking applications hoping to get my application fee.

Hey! I thought it was a "no closing costs" loan. It is, but there's an application fee of close to $500. Oh.  

Now I suspect refinances are just another category of modern banking craziness.

Friday, February 24, 2012

Why Apple CAN Improve Chinese Labor Practices

This NY Times article, The Dilemma of Cheap Electronics, about Chinese factory labor versus prices on Apple products deserves a reply and here is mine:

The answer is simple because each new piece of electronics gets priced at whatever the manufacturer chooses, and there are many new pieces of electronics year after year.

Apple can easily say the iPad 3 will cost $100 more, and make sure that $100 is in the cost of the factory labor. Because a new technology is being introduced, people will buy it regardless of the price. Yes, undoubtedly there is market research telling Apple at what dollar figure American consumers are price resistant, but of all the companies, Apple is the least concerned with price. Apple sets the new standard of pricing with each new product.

Work from this premise and you realize that every American company with factory workers in China can raise their prices easily. And that approaching Apple, the least price-sensitive company, is the right tactic.

The next part of the problem is to shake down the Chinese factory owners who are making huge profits off the backs of their workers. That's harder to control. No doubt the owners will want the same percentage of profit as in the past. In other words, $99 out of every $1 price rise, or whatever the outrageous figure is. Making that profit and loss statement look different is a much harder trick to pull off, but the threat of going somewhere else is Apple's great leverage.

Bottom line, Apple has the power, and Apple ought to be pressed to make things better. Why not? Every Apple product we buy means a number of Americans who don't have factory jobs. Apple owes its customers some portion of peace of mind about the people it does employ in factories.